💰 Financial Performance

Revenue Growth by Segment

Total consolidated revenue from operations for H1 FY26 reached INR 1,197.25 Cr, representing a growth of 18.7% compared to INR 1,008.44 Cr in H1 FY25. Q2 FY26 revenue stood at INR 597.46 Cr, up 13.1% YoY from INR 528.42 Cr.

Geographic Revenue Split

Not specifically disclosed in the provided documents; however, the company operates primarily out of Andhra Pradesh, India, with its registered office in Tanuku.

Profitability Margins

Net Profit Margin for the owners significantly improved to 5.47% in Q2 FY26 (INR 32.67 Cr) from 0.84% in Q2 FY25 (INR 4.42 Cr). For H1 FY26, the net profit attributable to owners was INR 56.17 Cr, up 192.2% from INR 19.22 Cr in H1 FY25.

EBITDA Margin

Operating profit before working capital changes for H1 FY26 was INR 106.20 Cr (8.87% of revenue), a substantial increase of 187.5% from INR 36.94 Cr (3.66% of revenue) in H1 FY25.

Capital Expenditure

Capital expenditure for H1 FY26 (purchase of PPE, intangible assets, and CWIP) was INR 31.87 Cr, a decrease of 49.3% from the INR 62.91 Cr spent during H1 FY25.

Credit Rating & Borrowing

Finance costs for H1 FY26 were INR 1.30 Cr, an increase of 176.6% from INR 0.47 Cr in H1 FY25, indicating higher utilization of credit facilities or increased borrowing rates.

⚙️ Operational Drivers

Raw Materials

Sugarcane (for sugar and alcohol), Salt (for Chlor-Alkali), and various chemical precursors; Cost of materials consumed reached INR 617.61 Cr in H1 FY26, representing 51.6% of total revenue.

Import Sources

Not specifically disclosed, though primary sourcing is likely domestic (Andhra Pradesh) for sugarcane and salt.

Key Suppliers

Not disclosed in the available financial statements.

Capacity Expansion

Current installed capacity not specified in units, but the company is optimizing its footprint by permanently closing an unviable 30-year-old unit effective October 1, 2025, which previously contributed 0.73% to total profits.

Raw Material Costs

Raw material costs increased by 23.0% YoY in H1 FY26 to INR 617.61 Cr from INR 501.95 Cr, outpacing revenue growth and suggesting inflationary pressure on inputs.

Manufacturing Efficiency

Depreciation and amortization expenses for H1 FY26 were INR 37.99 Cr, reflecting a stable asset base compared to INR 36.43 Cr in H1 FY25.

Logistics & Distribution

Not specifically disclosed; however, other expenses (including distribution) were INR 113.53 Cr for H1 FY26.

📈 Strategic Growth

Expected Growth Rate

18.70%

Growth Strategy

Growth is driven by a diversified product portfolio including high-value liquid and solid propellants for space/defense, expansion in the Chlor-Alkali and Aspirin markets, and improving margins by phasing out unviable 30-year-old operational units.

Products & Services

Sugar, Industrial Alcohol, Chlor-Alkali products (Caustic Soda, Chlorine), Sulphuric Acid, Aspirin, Liquid & Solid Propellants, and Electrical Power.

Brand Portfolio

The Andhra Sugars Limited.

New Products/Services

Not specifically detailed in the interim reports, though the company continues to focus on its specialized propellant and chemical segments.

Strategic Alliances

The group includes one subsidiary (assets of INR 289.59 Cr) and one associate company.

🌍 External Factors

Industry Trends

The industry is moving toward ethanol blending and specialized chemicals for defense; Andhra Sugars is well-positioned with its industrial alcohol and propellant divisions, achieving a 187.5% jump in operating profit in H1 FY26.

Competitive Landscape

Competes with other large-scale sugar mills and diversified chemical manufacturers in India.

Competitive Moat

The company possesses a cost leadership moat in integrated sugar-to-chemical operations and a technical moat in the production of specialized liquid and solid propellants for the space industry.

Macro Economic Sensitivity

Highly sensitive to agricultural cycles (sugarcane) and industrial demand for chemicals; H1 FY26 results show strong resilience with a 18.7% revenue jump despite global macro uncertainties.

Consumer Behavior

Increasing demand for green energy (ethanol) and domestic pharmaceutical ingredients (Aspirin) is positively impacting demand.

Geopolitical Risks

Potential trade barriers on chemical exports or changes in domestic sugar export quotas could impact top-line growth.

⚖️ Regulatory & Governance

Industry Regulations

Subject to sugarcane pricing (FRP/SAP), ethanol procurement prices set by the government, and environmental norms for chemical discharge and power generation.

Environmental Compliance

Not specifically disclosed, though the company operates in highly regulated chemical and sugar sectors requiring significant ESG adherence.

Taxation Policy Impact

Effective tax rate for H1 FY26 was approximately 25.4% (INR 19.12 Cr tax on INR 75.27 Cr PBT).

Legal Contingencies

The company maintains internal financial controls; auditors expressed an unmodified opinion on the effectiveness of controls as of March 31, 2025.

⚠️ Risk Analysis

Key Uncertainties

Raw material price volatility (sugarcane/salt) and the operational viability of aging plants (leading to the closure of a unit in Oct 2025).

Geographic Concentration Risk

High concentration in Andhra Pradesh, making it susceptible to regional policy changes and local weather patterns affecting crop yields.

Third Party Dependencies

Significant dependency on local farmers for sugarcane supply and government agencies for propellant off-take.

Technology Obsolescence Risk

Risk identified in older units (30+ years), addressed by the board's decision to close unviable operations to maintain group-wide technological relevance.

Credit & Counterparty Risk

Trade receivables stood at a level requiring a decrease of INR 65.31 Cr in H1 FY26 to manage working capital, indicating active credit management.